This post is for those interested in some of the more technical details surrounding the Edgewater Casino application. To read the full application, visit the City of Vancouver site.

Procedural Issues

1. No Adequate Notice to Public

The application before Council is described as a re-zoning application by PavCo (crown corporation BC Pavilion Co). Included, but not detailed in the public notice, is a second application by Edgewater Casino for a by-law amendment licensing approximately 1000 new slot machines and 75 new slot machines; Notices mailed only to residents within a 2 block radius of the project, etc.

No notice to public of scale of expansion: gaming floor equivalent to two NFL football fields (114k sq. ft)

2. Due Diligence gaps

a) Calculation of expected revenues only, no calculation of expected costs–policing, counseling, housing homeless;
b) No report on mental health and addiction issues/social ills;
c) Policing report is one paragraph long. Only one sentence respecting organized crime, money laundering. No estimate of impact or cost to manage. No weapons policy or enforcement provisions in a casino/hotel/sports complex. No reference to the RCMP report cautioning about extreme vulnerability to organized crime and infiltration.
d) Background check of Paragon Gaming–corporate profile misrepresented in public materials. No assessment of suitability to operate a major project of this scale.

3. Key Information Relevant to Public Review

PavCo represents that there is no risk to the taxpayer in the corporate structure of the project; however:

Do FDC’s and AFDC’s extend to ancillary buildings such as hotels, restaurants, theatres, and parkades?

Projections indicate the cost of the complex will be approximately $450 million. 42% is almost $190 million in public money. The BC Lottery Corporation has budgeted for capital expenditures of $346 million over the next 3 fiscal years. What percentage of that will go into the Edgewater development?

4. Irregularities in the BC Lottery Corporation and PavCo Bid Process

a) BC Lottery Corporation board chair Richard Turner purchases shares in Paragon Gaming (operating in Alberta) in 2003. Share purchase violates board code of conduct, and is not disclosed until 2005.
b) In late 2005 Turner resigns from BCLC board. Summer 2006 Paragon Gaming purchases Edgewater Casino out of bankruptcy and installs Turner on the board of Paragon.
c) Fall 2008, City plan for Northeast False Creek is amended to permit major casino at request of PavCo.
d) March 2009, PavCo puts out an RFEI (Expressions of Interest), with an 18 day window. Only two respondents, including Paragon, reply. While the Paragon bid is before PavCo during the RFP phase one month later, Turner issues a $50k cheque to the BC Liberal Party. Paragon Gaming is the successful bidder
e) Autumn 2009 Turner places a phone call to Minister Kevin Krueger advising that Paragon will withdraw if the roof is not built per plans.

What were all the communications between Richard Turner and PavCo in the period 2005-2009?

5. Criminal Concerns

2006: Richmond loan shark Lily Li is murdered. Evidence emerges at trial that loan sharks operate on shifts 24/7 inside River Rock Casino;2009, January: RCMP special unit IIGET (Integrated Illegal Gaming Enforcement Team) issues a report to government warning of “extreme vulnerability” of casino industry to organized crime–money laundering, infiltration, loan sharking. No resources to investigate suspected money laundering. Concerns expressed about perception of conflict of interest and corruption. Most information redacted from report.2009. February: IIGET disbanded2010/ Summer: BC Lottery Corporation fined by FINTRAC for repeated failure to monitor suspicious transactions. First fine of its kind in Canada.2010/August-October: CBC investigates over $8 million in suspicious transactions at 2 casinos in Metro Vancouver, including $460k in 20’s in plastic bags, and a suitcase with $1.2 million in casino chips.
Insp. Baxter, head of Proceeds of Crime Unit, calls transactions suspicious. Solicitor General Rich Coleman, also responsible for gaming, disagrees that transactions are suspicious and publicly disagrees with Baxter.

Conclusion: Weak BCLC enforcement of rules of conduct and poor compliance and oversight of casinos, leaving the industry vulnerable to uncontrolled criminal conduct and potentially to infiltration.

6. Paragon Gaming: Parent Co of Edgewater

All other projects and operations are on First Nations reserves in the US and Canada. All are small market. No international tourism expertise. No expertise with the Asian market.

BC’s model: Closed door bidding process with a single (geographically pre-selected) casino applicant, and no public input.

By contrast, Missouri recently awarded a casino license in an open, public, competitive bidding process, with multiple applicants and more than one physical location. The successful bidder demonstrated both strong community support via a referendum, and strong local roots in the community. Paragon Gaming was one of the bidders in this process, but was unable to garner a single vote of support from the Missouri Gaming Commission.

US small market casino operations have notoriety, particularly vis-à-vis political corruption. In more than one instance, individuals with some connection to Paragon Gaming or their advisors have been implicated, charged, or convicted on political corruption charges. A detailed background check on Paragon Gaming is recommended, including investigation of the relationship of Paragon principles with Milton McGregor and Robert Sigler (shareholder in Paragon Gaming Missouri) of Alabama.

Photo: Dennis Tsang To learn more about the actual relationship between the stadium roof and the mega-casino, read this series of articles in the Vancouver Observer. Paragon, a Vegas casino company, was awarded the contract to build and operate the mega-casino in a very iffy bid process. It was awarded the contract by BC Pavilion Corp—a crown corporation known as PavCo which owns the land next between BC Place and the Cambie bridge. See here. Rumour has it that that Paragon told BC Liberal minister Kevin Krueger last year that without a retractable roof on the stadium, Paragon would refuse to build the mega-casino because supposedly without the draw of a retractable stadium roof, the stadium wouldn’t attract enough clientele to the casino. As for the mega-casino, this is a process that has been occurred very much under the radar of most Vancouverites who are unaware of what’s coming: a new development three times the size of the original Edgewater Casino currently located in an inconspicious spot on the other side of the stadium. City Hall has been strangely silent on the issue of this massive gambling expansion, considering that the BC government application to the city to expand gambling within our city limits will soon be before Council.

Stadium roof scandal?

Some are saying that the retractable roof, one of the most expensive in the world, will cost twice the public estimate, and apparently engineers are not even sure that the underlying structure will support the roof in all conditions. At the very least, the City must get a full independent seismic assessment before granting the rezoning. And that’s not the only thing that City Council should be demanding of the provincial government before it negotiates further with them. Before Vancouver considers the government’s applications to expand gaming in Vancouver and to rezone the new casino site for a mega-development, the City needs to get the provincial government’s assurance that it will actually meet its legal obligations to hand over 1/3 of gaming revenues to BC’s charities and non-profits. (If the BC govt had honoured their 1999 Memorandum of Agreement, a legal document, they would have paid BC’s crucial charities and non-profits $1.3 bn more than they did; that amount is now in arrears). Both the City and Minister Coleman need to start coming clean about these developments.

Read the petition

Meta

Our Supporters against the mega-casino

To see the list of all those who supported our 2011 fight against the mega-casino at BC Place, both individual citizens and organizations, click here.

For statements and letters from some of our many supporters, click here.

WHERE THINGS STAND:
We had a victory in 2011, but what we defeated was gambling expansion from 600 to 1200 slot machines. Soon after, Vancouver City Council nevertheless passed the building at its proposed massive size, ripe for future expansion. Now, in light of the 2013 Kendall Report which shows a doubling of severe gambling addiction in BC in only 5 years, we believe City Council must immediately institute harm reduction measures if it plans to allow the relocation and building of Edgewater Casino at BC Place Stadium, in easy reach of residents and young people. Proximity to casinos is a major factor in rising addiction rates.